OECD Development Centre Working Papers

ISSN :
1815-1949 (en ligne)
DOI :
10.1787/18151949
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The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.
 

Revisiting Political Budget Cycles in Latin America You or your institution have access to this content

Auteur(s):
Sebastián Nieto Parra1, Javier Santiso
Author Affiliations
  • 1: Institut d’Etudes Politiques (Sciences Po Paris), France

Date de publication
14 août 2009
Bibliographic information
N°:
281
Pages
52
DOI
10.1787/221383354183

Cacher / Voir l'abstract

In this paper we test the impact of elections on fiscal policy in Latin American economies in comparison to OECD countries over the period 1990-2006. We find that in Latin American countries, the average primary balance declines by an amount close to 0.7 per cent of GDP during an election year, confirming the hypothesis of fiscal deteriorations during the election cycle. Most of this movement is due to the expenditure component and within this it is current (close to 0.8 per cent of GDP) rather than capital expenditure that is most affected. By contrast, in OECD countries, the observed changes in the primary balance and current expenditures during election years are minimal. Our analysis also suggests that re-elections of incumbent candidates in Latin America have a considerable impact on the expenditure side of the fiscal balance. Finally, by comparing the 2005-2006 electoral cycle with respect to prior electoral cycles, we note a slight improvement of fiscal management around elections in the region. We derive policy implications and recommendations from our findings.
Mots-clés:
elections, incumbent candidates, Latin America, political budget cycle
Classification JEL:
  • D72: Microeconomics / Analysis of Collective Decision-Making / Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • E62: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Fiscal Policy
  • H62: Public Economics / National Budget, Deficit, and Debt / Deficit; Surplus
  • P16: Economic Systems / Capitalist Systems / Political Economy